Asked by Maria Castro on May 11, 2024
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Noreen's RRSP is currently worth $125,000. For the next 10 years, she will make contributions at the end of every six months. How much does Noreen need to contribute at the end of every six months for the next 10 years to reach her goal of having a total of $500,000 when she retires? Her RRSP earns 8% compounded annually.
Compounded Annually
Describes interest on an investment that is calculated annually and added to the principal sum, thus earning further interest in subsequent years.
RRSP
A Registered Retirement Savings Plan, a tax-deferred savings account for Canadians to invest money for their retirement.
Six-month Contributions
Regular payments or deposits made over a six-month period, often related to investments or savings plans.
- Formulate financial targets by assessing required allocations for retirement planning, funding education, or substantial purchases.
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Learning Objectives
- Formulate financial targets by assessing required allocations for retirement planning, funding education, or substantial purchases.